US business out to clinch Capitol Hill drive

ByGuy Halverson, Business and financial correspondent of The Christian Science MonitorJanuary 7, 1980

Washington
— The US business community is viewing 1980 with a curious blend of optimism and concern. The optimism stems from the strident antigovernment political current sweeping through this capital city, a feeling that overly sever government regulations are unduly hampering US industrial development and plant construction.

The concern arises from the fact that even though the present Congress (elected in 1978) is considered more "conservative" than in past years, it has already enacted, or is on the verge of enacting, a broad range of legislation adding billions of dollars in new federal tax revenues -and extensive federal powers -during the next decade.

For that reason, business groups here and throughout the nation are carefully crafting together their key legislative priorities for the second session of the 96th congress, which convenes Jan. 22.

*Typing up the Federal Trade Commission. (FTC) with legislative restraints a move that was begun in Congress late last year.

*Whittling away at the powers of other government agencies, such as the occupational Health and Safety Administration (OSHA) and the Environmental Protection Agency.

*Backing various congressional options designed to foster capital formation in the United States.

These latter measures range from bills favoring accelerated depreciation allowances for business to tax exemption for certain portion of interest earnings of individuals while raising the exemption level for dividends

Currently, savings interest earnings are taxed, and there is a simple $100 deduction for dividend income for individuals and $200 for couples.

the Senate, by a 94-to-) vote, has already backed a proposal that would allow the first $201 of interest earnings or divideds for a single person, and $400 for a couple, to be tax exempt.

the measure, which late last year was attached to the windfall-profits bill, would slash federal tax receipts by $27 billion between 1981 (when the proposal would take effect) and 1990.

Meanwhile, support is strong within Congress for some form of captial cost recovery proposal for business.

Although the administration has not yet thrown its support behind various alternative legislative proposals.

For that reason, it is assumed that Mr. Carter will be forced eventually to back some form of stepped-up depreciation.

"The business community is perhaps better organized than at any time in the past decade," an aide to the House Banking Committee contends.

"In past years their clout was offset somewhat by the consumer lobby and certainly by Big Labor. But the consumer movement is almost dead," the aide says , "and labor has negligible links to the Carter administration. That means and 'open road' for the business lobby."

Ideologically, the returning Congress is often considered "centrist" to "conservative."

Perhaps underscoring this perception the most was the action by the house late last year subjecting FTC actions to a one-chamber veto by either branch of Congress. Although the Senate has not yet acted on the FTC legislation, the Senate Commerce Committee endorsed a bill requiring the agency to pull back from a number of proceedings, including one concerning children's advertising on television.

In fact, however, the 96th Congress enacted or began work on a broad range of ultimately far-reaching and highly expensive federal programs.

Congress, for example, is seeking a $227 billion tax on "windfall" oil profits, a $20 billion synthetic-fuel program, and establishment of a new agency to expedite construction of energy projects.

In addition, lawmakers have indicated they will increase defense spending.

Business groups, troubled by what they see as massive new tax increases set to take place during the early years of 1980s (including large increases in social security taxes), are expected to seek to trim back the administration's projected 1980-1981 fiscal year budget, which will go into effect Oct. 1.%TThe budget, which is expected to run in the range $600 billion to $620 billion, is up from the current level of $547 billion.

Mr. Carter will formally send the new budget to the Hill Jan. 28.

Additional issues being considred by business groups include the following:

*Social security tax rollback: Business is seeking a rollback or easing of new social security tax increases that are to take effect during the next few years.

If enacted ( and the measure will face tough sledding on the Hill), the exemption would constitute a sharp lessening of the powers of OSHA.

*Davis-Bacon Act revision: Major business groups are expected to step up their efforts to repeal or modify the act, which sets federal pay guideline for construction work involving the federal government.

*Seeking election of Republic (or "business oriented") candidates in crucial 1980 elections on the state level.

The winners, who will be seated in state legislatures, will be able to redistrict local election boundaries after the 1980 census.